There’s been a great deal of talk over the last year of
free-to-play and subscription models for online games. With a harrumph
and heads nodding in agreement, every pundit is saying that the
subscription-based MMOG is dead; gone forever. Even thinking of putting
out a new game that is subscription based will only lead to disaster of
Biblical proportions! All this talk is utter crap, and I’m
here to tell you why. Subscription based gaming will continue to
survive and live for a long time, baby.

There are a number of reasons why all this talk of the death of
subscription based gaming is premature, but we’ll look at the
main factors. Some of these factors may impact the others, and the
common denominator is money, which leads us to…

MONEY

Money is the single most important factor in online gaming. Game
companies need to make money to survive, despite many trollish
fantasies otherwise. Game companies spend a great deal of money to
create a game and get it to market. Most MMOGs take at least 2 years of
development and cost tens of millions of dollars. Sure, they recoup
some of that money when they sell the box set, but they’re
still in the hole.

The subscription fee fills that hole and then some, if the game is
successful. Getting 1 million people willing to pay you $14.95 a month
looks a lot better than getting 5 million people playing for free and
hoping they buy some stuff out of your cash shop. To this end, every
game company pants with hopeful longing towards
style="font-style: italic;">World of Warcraft
and
its 12 million subscribers. Let’s assume for the sake of
argument that every single subscriber is taking the least expensive
option of $12.95 per month for a six month bloc of time. That boils
down to a total of $155,400,000 per month! Aha, skeptics cry!
You forgot about maintenance, support, and all other operating costs
for all those players! Well, Blizzard released in 2008 their total
costs for operating WoW for five years; the total cost for that time
was $200 million dollars, which boils down to $40 million a year.
Let’s say that
style="font-style: italic;">WoW
was limping along with only a measly 6
million subscribers during that time using the $12.95 a month option
– this boils down to $77,700,000 per month. No wonder they
call it WoW;
you’ve already made $37 million profit for the
year on your
style="font-weight: bold;">first
month! (I have heard tales that the floors at
Blizzard are all imported Greek marble and the commodes are made of
pure gold!) Granted, there’s only one
style="font-style: italic;">WoW,
but these leads us
to…

CONSISTENTCY

Subscription fees are the most reliable index of the success or failure
of a game. Online games are a business and businesses abhor change.
They do not want, they need, to have all the possible variables for the
past, present, and future mapped out in order to shape their own
business strategy. The number of people willing to pay to play your
game shows how healthy your game is. Every game can get a rush of
people if it’s free, but a game has to have some merit if you
want people to pay for it. If the number of subscribers continues to
fall every month, the game company knows that they need to fix
something asap. Recent examples such as
style="font-style: italic;">Age of Conan
and Warhammer
Online come to mind. They
both started pretty hot at launch, but as
time went by, the subscriber numbers continued to dwindle until most
players left.

Businesses require a steady flow of income to be successful, and
subscriptions fill that need. Contrary to popular opinion, an MMOG
doesn’t need to have millions of subscribers to be
profitable.
style="font-style: italic;">Fallen Earth
is a good example. Lee Hammock, ex-Lead
Designer for
href="http://www.tentonhammer.com/node/74076">
style="font-style: italic;">Fallen Earth
stated that 50,000 subscribers
would make the
game profitable, and that 100,000 subscribers would make the game
extremely profitable.
style="font-style: italic;">EVE Online
is another good example. With roughly
350,000 subscribers, the game is profitable and new expansions continue
to be made. There is definitely a scale for what it takes to make a
game profitable.
style="font-style: italic;">Fallen Earth
and EVE
Online are niche games;
I’m pretty sure that
style="font-style: italic;">World of Warcraft
needs more than 50k
subscribers to make a profit.

Fallen
Earth disproves the lie that you need millions of subs to make a profit

PERCEPTION

Perception is another big reason why subscriptions are here to say. If
a game goes to free-to-play, it’s considered a failure in the
eyes of most gamers. Why is the game free? Wasn’t it good
enough to pay for? In our culture, we have an inborn distrust of
something for nothing. Old adages such as, “You get what you
pay for” and “What did you expect for
nothing?” say it all. A game going free-to-play is seen as a
sign of desperation. The biggest F2P story of the last two years isDungeons
and Dragons Online and
style="font-style: italic;">Lord of the Rings Online
going F2P and
increasing Turbine’s revenues.

The success of
style="font-style: italic;">DDO
and LotRO
shouldn’t be seen as a
repudiation of subscription-based gaming. The change in both games is a
success of subscriptions. Point one: both games were fully developed
and released as a subscription-based game. Therefore, they had enormous
resources poured into them as opposed to games designed from scratch to
be F2P. Point two: both games still offer subscriptions, which many
players choose to take advantage of.
style="font-style: italic;">DDO’s
unique design is
especially well suited to their hybrid model, with new instanced
content being available in their cash shop, but free to their
subscribers.

Even with the success of
style="font-style: italic;">DDO
and LotRO,
their increased revenue allowed
them to keep the games going and make a profit. However, that profit is
still a great deal smaller than a game with a higher subscription
count. Revenues for both games raised two to three times the previous
average. Sounds good, but if you were making $10,000 a year and got 2-3
times that amount, it’s not the same as if you were making
$100,000 a year and got that same increase. In a nutshell, both games
were spiraling downward and embracing a hybrid subscription model was a
last chance to keep the games alive.

Be honest with yourself, how many MMOGs have you played and found
lacking and said to yourself, “I wonder how long this game
will last before it goes free-to-play?” I’ve done
it with Warhammer
Online,
style="font-style: italic;">Champions Online,
and Star
Trek Online. A
game goes free-to-play because it is failing, not because
it’s a roaring success.

GAME BALANCE

The cash shop adds another facet to perception, which is game balance.
Games that rely upon a cash shop for their survival tend to deserve the
scornful descriptor, “free to play, pay to win.”
Most players want to earn their epic gear. If someone can just go into
a cash shop and purchase the best items, then why play the game in the
first place? If questing and exploring are taken out of the mix, then
it boils down to whom spends the most money on their items to determine
who’s best.

Again, skeptics cry out and say that the cash shop can offer limited
items for sale. However, that argument doesn’t hold water in
the long run. If your entire financial stake is built upon a cash shop,
and if players continually demand cooler and better items in that shop,
eventually the game company will capitulate and offer such items or
risk losing those players. Once a player can buy Thor’s
hammer from the cash shop, it’s all over. Pretty soon,
players who spent countless hours dungeon raiding to get some decent
gear will be wiped off the map by some 13 year old kid and his
dad’s credit card. What’s the fun in that? The end
result will be in a great deal of frustration for normal players who
don’t have tons of cash to spend, and they will leave the
game.

VALUE

This last category is a catch-all and incorporates some of the other
factors. Free-to-play games are extremely popular in the Eastern
market, and microtransactions (cash shops) are considered mainstream.
In the West, we have a different perspective. First, our attitude
towards F2P games in general. If a game is released as F2P, we consider
it flawed. If a game becomes F2P, we can smell the odor of desperation
from that game. Why is the game free, we ask? Does the gameplay suck?
Was it failing? What’s the catch?

The catch is, of course, the cash shop, which most F2P games employ to
destroy impulse buyers. A player, if they’re not careful, can
go on a spending spree and realize that they spent much more in a few
days than they would have in a six month subscription. Also, many of
the free-to-play games force you to buy things that you normally would
acquire through questing in a subscription game or items that you need
to make the gameplay experience tolerable. Many F2P games offer healing
potions only in the cash shops, not from loot drops. You want a speed
increase to run that vast distance to that next quest point? Buy it
from the cash shop! Unless a player wants to grind forever for mundane
items such as healing potions, they’re forced to spend real
world cash for it. Not so free now, isn’t it?

Overall, subscriptions are a good value. For the amount of time that a
player spends online in an MMOG, those fifteen bucks is quite the bang
for the buck. You can spend $60 on a console game and have it finished
in 20-30 hours. With MMOGs, you will be playing for years. With a set
fee, a gamer can plan their monthly finances accordingly, and not be
surprised that they spent $80 on cool cosmetic gear in the cash shop
for their raccoon ranger.

All in all, subscriptions are here to stay. Free-to-play will continue
to have a place in the industry, but game companies need a reliable,
steady source of income to develop a game and to keep it going. A game
can be built around a F2P model and be successful, but I doubt that any
AAA MMOG will ever be released as F2P. Heck, even console gamers
aren’t immune to subscriptions. How much you paying for that
Xbox Live account? For their part, gamers want a somewhat balanced
world that they can explore and adventure in. Even spending $14.95 a
month isn’t a bad deal. Catching a single movie at the
theater will run you $10, and that’s before the popcorn and
soda! However, I would not be adverse to some companies lowering their
subscription fees. There are some games that I don’t feel
that comfortable with at $14.95 a month, but I would be willing to pay
$9.95. However, the core principle that subscriptions are here to stay
stands.